Inherited IRA Distribution Rules
Inherited IRA distribution rules come into play when an IRA participant dies. The post-death distribution rules for an Inherited IRA depend on many factors:
- Whether the IRA owner died before or after they were required to begin receiving distributions from their IRA.
- Whether the IRA owner designated beneficiaries to receive distributions from their IRA following their death.
- Whether the IRA owner designated a spouse, a non-spouse, a minor child, an adult child, or a trust as the beneficiary.
- Whether the IRA owner designated multiple beneficiaries.
- Changes in the law governing the taxability of inherited IRAs.
In December 2022, Congress passed the SECURE Act 2.0. This law significantly changes the ability of most beneficiaries to stretch out their distributions over their lifetimes. Because of the complexity of this law, anyone who is a beneficiary of an IRA or other qualified retirement plan should consult with a knowledgeable tax advisor to understand the various distribution options and requirements associated with this law.